7b supp

ITEM NO.   _7b_Supp________ 
DATE OF 
MEETING: October 25, 2011 

2012 Operating Budget Update 

Commission Briefing 
October 25, 2011

Budget Overview 
Key Drivers: 
Baseline payroll increases and contractual increases 
New Rental Car Facility / Busing Services 
Terminal Realignment 
Deferred Maintenance 
Initiatives Tied to Strategic Goals & Century Agenda 
Audit Committee/Internal Audit Initiatives 
Other initiatives including Enterprise Risk
Management, Medical Plan Review/Design, Business
Process Improvement 

2

Budget Changes Summary 
As of     As of       $
($ in '000s)                     10/4/11    10/11/11    Change                       Notes
Operating Revenues
Aeronautical           238,149    235,619    -2,530  Cost recovery
Non-Aeronautical       149,828   150,111     283  Higher Rental Car and Concessions revenues
Other (adjusted)           934     1,234     300  Fed Operating Grant Rev for Fire Dept
Aviation               388,911    386,964    -1,947
Seaport               98,151    98,151      0  No changes
Real Estate               32,828     32,828       0  No changes
CDD                0      0     0  No changes
Corporate                151      151      0  No changes
Other Operating Revenues   131,131   131,131      0
Total                  520,042    518,095    -1,947
Operating Expenses
Aviation               162,909    160,851    -2,058  See next slide for details
Seaport               20,408    20,408      0  No changes
Real Estate               37,166     36,416     -750  See next slide for details
CDD              15,528   15,516    -12  Direct Charge Refinement
Corp                76,655    76,535    -120  Remove a proposed Police position and cut $10K
Total                  312,666    309,725    -2,941
Net Operating Income       207,376   208,370     994
3

Budget Major Changes Since 10/4 
Division (in $ 000's)                        Change  Notes
Aviation
1) Remove RCF Traffic Support Specialists         (436)      Remove 7.6 new FTEs
2) Delay hiring of RCF Bus Drivers               (526)      Start on 3/1/12
3) Removal AV Maintenance positions          (735)     Remove 9.0 new FTEs
4) Delay Hiring Some Positions                (243)      7 new positions
5) Natural Gas Rate Change                  (127) 
6) Remove Window Cleaning                (90)
7) Remove Remote Cruise Facility              (84)
8) Add Joint Marketing Fee                   300  For new international air services
9) Other Reductions                      (120)     Include the removal of 4 pathfinders and 1.25 interns
Total                               (2,058)
Real Estate
1) Pier 69 Carpet Replacement                (400)     Deferred $400K to 2013 ($800K in 2013)
2) Maximo Mobility Intergration               (100)     Deferred $100K to 2013
3) Pier 69 Concrete Beams Rehab              (250)     Deferred $250K to 2013
Subtotal                            (750) 
CDD
1) Direct Charge Refinement                 (12)
Subtotal                             (12)
Corporate
1) Leadership Conference                   (10)  Reduce new request from $51K to $41K
2) Deleted a Proposed Police Position           (110)      Redeploy officers from other duties to RCF
Subtotal                            (120) 
TOTAL                       (2,941)

4

Operating Budget Summary 
2010   2011   2011   2012    $ %
($ in '000s)                    Actual  Budget Forecast  Budget Change Change                       Notes
Operating Revenues
Aeronautical         198,329 217,200 214,181 235,619 18,419  8.5% Cost recovery
Non-Aeronautical      135,052 144,601 144,541 150,111  5,510  3.8% Including $9.1M RAC operating revenue.
Other (adjusted)          880    877    877   1,234   357  40.6% $7.8M Fuel Hydrant rev is reclassified as non-op.
Aviation              334,262 362,678 359,599 386,964 24,286  6.7%
Seaport              97,279  98,153  95,961  98,151    -1  0.0% $2.1M reduction in pass-through grant.
Real Estate             30,391  30,942  31,030  32,828  1,886  6.1%
CDD              36                   n/a
Corporate              610  1,025  1,202   151  -874 -85.2% $990K for AAPA Conference in 2011 budget.
Other Operating Revenues  128,316 130,119 128,192 131,131  1,012  0.8%
Total                 462,578 492,798 487,792 518,095 25,297  5.1%
Operating Expenses
Aviation              126,481 139,575 137,120 160,851 21,276  15.2%
Seaport              19,517  23,242  19,200  20,408 -2,834 -12.2% $2.1M pass-thro grant and $500K for env. reserve exp.
Real Estate             30,739  33,741  33,741  36,416  2,675  7.9%
CDD             9,335 14,278 14,278 15,516 1,237  8.7%
Corp               67,391  75,008  73,969  76,535  1,527  2.0% See notes (1), (2) & (3).
Total                 253,464 285,844 278,308 309,725 23,881  8.4%
Net Operating Income      209,114 206,954 209,484 208,370  1,416  0.7%

5

Comprehensive Budget Summary 
($ in 000s)                     2010 Actual 2011 Budget  2012 Budget Change $ Change %         Explanations
Revenues
1. Aeronautical Revenues                  198,329      217,200      235,619    18,419      8.5%  Cost recovery
2. Operating Revenues                    264,250      275,598      282,476     6,878      2.5%  Seaport , R.E. Non-Aero & Corp
3. Tax Levy                            73,125       73,500             73,500      - 0.0%
4. PFCs                               59,744       60,379             63,448     3,069      5.1%  Increase in enplanement
5. CFCs                               23,243       22,237             21,333      (904)    -4.1%  Classify portion as ops revenue
6. Fuel Hydrant                           7,912        7,839        7,839               0.0%  Reclassified from ops revenue
7. Non-Capital Grants and Donations           12,473        8,493        1,779     (6,714)         -79.1%  EMW winding down
8. Capital Contributions                     30,518       32,106             31,448      (658)    -2.0%  FAA & DHS grants
9. Interest Income                        13,096       13,654             5,748     (7,906)         -57.9%  Lower interest rate 1% vs. 1.86 %
Total                             682,690      711,006      723,190    12,184     1.7%
Expenses
1. O&M Expense                        253,464      285,844      309,725    23,881      8.4%  Partially due to new RCF/BMF
2. Depreciation                         160,775      160,491      158,479     (2,012)          -1.3%
3. Revenue Bond Interest Expense            133,239      148,206      135,806    (12,400)    -8.4%  Reduction in capitalized interest
4. GO Bond Interest Expense                17,463       13,780             14,926     1,146      8.3%  New issue and increase interest
5. PFC Bond Interest Expense                10,187       10,191             6,826     (3,365)         -33.0%  Savings from bond refunding
6. Non-Op Environmental Expense            22,730        6,200        5,290      (910)    -14.7%  Due to superfund sites
7. Public Expense                         25,085       17,205             5,654    (11,551)    -67.1%  Reduction of FAST I and II projects
8. Other Non-Op Rev/Expense                7,276        2,521        3,576     1,055     41.9%
Total                            630,220      644,438      640,282    (4,156)         -0.6%
Change In Net Assets                  52,470      66,568           82,907    16,340    24.5%
Total Revenues were $12.2M higher than 2011 budget and $40.5M higher than 2010. 
Total Expenses were $4.2M less than 2011 budget and $10.1M higher than 2010. 
Change in Net Assets were $16.3M above 2011 budget and $30.4M higher than 2010. 
6

Corporate Cost Analysis 
($ in 000's) 
2010         2011          2011         2012 
Actual        Budget       Forecast       Budget 
Corporate Cost                     67,391        75,008        73,969        76,535 

Total Revenue                     462,651       492,798       487,719       518,095 
Total Expense                     253,464       285,844        278,547       309,725 

Corporate Cost as % of Revenues         14.6%        15.2%        15.2%        14.8% 
Corporate Cost as % of Expense          26.6%        26.2%         26.6%        24.7% 


7

Port-wide FTEs Summary 
Aviation  Seaport Real Estate Capital Dev Corporate   Totals
2011 Approved FTE's        761.9    60.4     164.8     262.5    447.6   1697.2
Mid Year Approval        10.1     0.4       1.0       2.0      3.7     17.2
Eliminated             0.0     -1.7      -1.0       0.0      -0.5     -3.2
Transfers               1.0     0.0       0.0       0.0      -1.0      0.0
Adjusted 2011 FTE's        773.0    59.1     164.8     264.5    449.8   1711.2
2012 Budget
Eliminated             0.0     0.0       0.0       -9.8      0.0     -9.8
Transfer                0.0      0.0       0.0       0.0      0.0      0.0
New FTE's           86.0     0.8      1.0      1.0     2.4    91.2
Total 2012 Changes         86.0     0.8      1.0      -8.8      2.4    81.5
Proposed 2012 FTE's       859.0    59.9     165.8     255.8    452.2   1792.7

8

Next Steps 
First Reading and Public Hearing of the 2012
Budget on 11/8. 
Second Reading and Final Passage of the 2012
Budget on 11/22. 
Release the 2012 Final Budget and Draft Plan of
Finance Document to the Public on 12/14. 


9

ITEM NO.   _7b_Supp________ 
DATE OF 
MEETING: October 25, 2011 

2012 Operating Budget Update 

Commission Briefing 
October 25, 2011

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